Cape Town taking its place as an energy capital

Note to editors: the following speech was delivered by City of Cape Town Executive Mayor, Patricia de Lille, at the opening session of the 2016 World Energy Cities Partnership annual general meeting.

Mayor of Halifax and President of the World Energy Cities Partnership, Mike Savage

Mayor of Stavanger and former president of the WECP, Christine Sagen Helgø

Lord Provost of Aberdeen, George Adam

Lord Mayor of Perth, Lisa Scaffidi

My fellow mayors from the World Energy Cities Partnership

Chairperson of the South African Oil and Gas Alliance (SAOGA), Mthozami Xiphu

Ladies and gentlemenGood morning.

It is a privilege for me to welcome 13 cities from the World Energy Cities Partnership (WECP) to our city.

Cape Town is the newest member of the WECP and we are excited to share with you opportunities and developments in our city, our province and our country.

There is no doubt in my mind that Cape Town is one of the world’s emerging energy capitals.

This week alone there are four international energy conferences in this city: this conference, the World Energy Cities Partnership, Windaba and its sister conference WindAc Africa, as well as Africa Oil and Gas Week.

Cape Town is not only becoming a place for industry leaders to think about their energy development strategies, it is also a place which is leading the way in energy sector development across all sources of energy.

In Cape Town we understand the opportunities in developing a renewable energy sector.

That is why the City has worked with the Western Cape Government, GreenCape and the National Government to develop the Atlantis GreenTech Park, which we hope will be declared a Special Economic Zone very soon.

At this time more than R680 million in investment in various green industries has happened in this area, and there is more than R1 billion worth of further investments in the pipeline.

To date, about 300 direct jobs have been created in the area.

We are also proud of our developing oil and gas sector. Cape Town companies are, for the most part, well represented across the value chain of the oil and gas industry.

As with any international city of a similar size, Cape Town has a well-developed downstream oil and gas industry, with a relatively strong outbound logistics network and established wholesalers and retailers of products.

In terms of midstream capacity, the presence of one of only five refineries in South Africa in our city, which produces 110 000 barrels per day, means we are a large producer of refined petroleum.

The development of new fuel terminal, storage and distribution facilities in the Port of Cape Town will further enhance this city’s role in midstream activities.

Arguably the most competitive part of the Cape Town region’s oil and gas value chain is its support services for upstream oil and gas activities.

Our city’s relative proximity to an offshore production region, together with our advanced infrastructure and liveability, has meant that a number of the world’s largest oil companies have established regional head offices in the city.

Their work is supported by many international auditing firms, project management companies, and law firms.

With that in mind, allow me to thank Dentons, a law firm, for their sponsorship of this event this morning.

Cape Town is a great place from which to service oil and gas projects around Africa.

And for this reason the City of Cape Town is working with its partners at Wesgro and in the provincial government to constantly improve air connectivity between our cities and other African destinations.

We are making progress in this regard, and in the last year our connectivity with the East African region has improved significantly.

We are working on further destinations at this time, and hope to also secure a link with the south-eastern United States.

Of course the oil and gas sector across the world has seen better days.

I am conscious of the fact that as we meet in Cape Town this week, the oil price remains low.

The current low oil price is not conducive to new exploration. But the time will come, hopefully soon, when that changes.

There are potentially exciting opportunities offshore, and I am aware that the speaker following me today will inform us of these opportunities.

It is important that we are ready to capitalise on these upstream exploration opportunities when the time is right, but we need to be ready for that.

And in this regard, it is important that the remaining regulatory challenges with regard to the Mineral Petroleum Resources Development Act are resolved very soon.

I recently wrote to the Minister of Mineral Resources, Mosebenzi Zwane, expressing my hope that the regulatory issues can be swiftly dealt with and I expressed a desire to discuss these matters with him further.

I am informed that stakeholders are working together on these matters, and I hope they can make the required amendments to ensure that the regulatory environment is as enabling as possible for new investments and collaborations.

South African is diversifying its energy mix. Gas-to-power procurement is imminent and the focus of much international interest.

Cape Town has begun to investigate its role in the gas economy.

These investigations include understanding the conditions under which the city could contract for power directly as well as exploring its role as a distributor.

While the Western Cape missed out in the recently announced IPP programme for gas, there was a ministerial determination for 600 MW of gas to power in the region.

This, combined with the requirement to retrofit the Eskom Ankerlig power station in Atlantis, makes a compelling case for gas into the region.

The City of Cape Town is supportive of efforts to develop gas-to-power facilities in the region.

I am excited about the opportunities for building a diverse energy supply in this region – one in which both renewables and gas grow their respective contributions.

The time for gas and renewables to collaborate has come.

In closing, I look forward to engaging with my fellow mayors this week and learning about energy sector development across all energy sources in the coming days. Thank you for travelling to Cape Town.

I would like to express my appreciation for this event to the partners who work every day to further advance the energy sectors in Cape Town, the Western Cape and South Africa.

These include the Western Cape Government, GreenCape, the Saldanha Bay IDZ and the South African Oil and Gas Alliance.

And I would like to thank the many speakers who will share new developments with us this morning and over the coming days, including our colleagues from the Petroleum Agency South Africa, the Department of Energy, the Department of Trade and Industry, the Transnet National Ports Authority and the Oil and Gas Council.